RMTU general secretary Wayne Butson (in the yellow vest) with colleagues at the Dunedin Hillside Workshops

“There’s a positive ‘smell’ about the place” – By Iain MacIntyre

A joint KiwiRail management/Rail & Maritime Transport Union (RMTU) initiative to evolve the company’s culture from a traditional managerial hierarchy to one based on an empowered workforce is delivering demonstrable benefits in productivity, quality and overall morale.

Labelled ‘High Performance High Engagement’ (HPHE), the initiative was launched under former KiwiRail chief executive Peter Reidy in an attempt to address negatives which had arisen within the business.

Interviewed in December last year, KiwiRail acting chief executive Todd Moyle says the company had developed a ‘top-down’, asset-centric focus within which was a notable lack of trust, confidence and belief. Having researched matters, during the 2014/15 financial year KiwiRail management partnered with the RMTU and engaged external consultants to embark on the HPHE path, which Mr Moyle describes as being similar to the ‘agile’ concept of working.

KiwiRail acting chief executive Todd Moyle: “I’m impressed every day I go out into the business and see these teams really taking ownership”

“It’s about getting the frontline really engaged in what the problem is, what the solutions are to solve those problems, and then taking ownership of it,” he says. “You don’t do it in a traditional way where you sit down and say ‘we’re going to get from here to here and do this task and that task to get to that end point’. It’s about getting teams together and saying ‘what are our problems’ and then finding ways forward,” he notes.
“Sometimes you have to fail fast and try again, and you evolve your way through it. Doing it in partnership and taking everybody with you on that journey is absolutely crucial.”

Mr Moyle candidly acknowledges this modern ‘bottom-up’ approach presents a “real challenge” to anyone embedded in traditional concepts of leadership. “You have got to give up control and you’ve got to trust the process. It creates a vulnerability in leaders, and some are just not up to that task. Part of it is finding evolving people and evolving leaders that can work in that environment.”

Stratospheric benefits

Highlighting the contributions of Council of Trade Unions president Richard Wagstaff and KiwiRail human resources group general manager Andrew Norton in the process to date, Mr Moyle says the benefits have been “stratospheric”.

A prime example is KiwiRail’s Palmerston North depot, where the various teams onsite have united to forge safety, process and infrastructure-related improvements in the servicing of locomotives.

“They have taken out over a third of the time to service a locomotive on that site – and that’s not done through leadership, that’s done through frontline teams really taking ownership of it,” Mr Moyle says.

“Then you go outside of that and they’ve changed traffic management on the site, so they can make it safer for vehicles coming in. And you go out into the yard and they’ve gone and painted all the light poles and other things to minimise the chance of vehicles backing into them at night.

“Often it is these small things, where people feel they have the ability to make change – they own their site, they own what they do. That changes culture; it empowers people and makes them very engaged with what they do every day in their area,” he adds.

“That’s just one example. I’m impressed every day I go out into the business and see these teams really taking ownership. If you go back four or five years, it was very hierarchical – people felt they had to ask for authority or permission to make those changes.”

Different ways of doing things

Mr Moyle says another reflection of the evolving culture is the evident desire to encourage diversity and explore “different ways of doing things”. This has been illustrated by women now assuming 35% of KiwiRail’s leadership roles from a low-teens percentage starting point, as well as the ‘Toi Toi’ Maori leadership programme fostering some “outstanding” leaders.

In addition to a “dramatic” improvement in morale, the cultural evolution is delivering definitive bottom-line business benefits, says Mr Moyle. “We’ve made $52 million in productivity savings over the last three years – there has been a really strong focus to get ourselves fit for business. That is no small amount of saving, and HPHE has had a large part to play in that.

“It is too early to say if it has had a demonstrable impact on retention – we have quite a low rate of staff turnover anyway – but the thing that stands out for me is there is something about the ‘smell’ of the place that attracts people into rail now. For example, we had over 800 applicants for five graduate positions [in 2018].”

Furthermore, the positive relationship that now exists between KiwiRail management and the RMTU saw the parties last year able to negotiate a revised collective employment agreement in just three hours. “That didn’t happen three years ago – then, we would have spent two or three months of argy-bargy to get to that point,” Mr Moyle notes.

“It was also a landmark pay deal for us and, I think, the union, because it wasn’t a percentage increase, it was a fixed-rate increase – that meant the people in the lowest-paid roles got the highest increase.”

External stakeholders have also noted a change in the business, as reflected by one recent customer observation that “it feels like the domestic sector is moving through Teflon this year”.

“As I see it, that’s a good indication that friction points are being resolved at the right level of the organisation,” continues Mr Moyle. “I think previously, it would get to a point where it was a bit ‘sticky’ and things would roll up. That’s coming through in not only our productivity benefits, but our on-time performance and delivery to customer needs.”

Continuing the momentum

With all relative indicators apparently moving in a positive direction, Mr Moyle says the parties remain firmly focused on continuing the momentum.

“It is not an easy process – it takes commitment, time and endurance to imbed. I equate that to being like a family – you always love them, but you might not like them at certain points,” he says. “But the results are worth it – they are long-lasting, enjoyable and tangible, because they have evolved through that collaborative approach, as opposed to just trying a hierarchical implementation of change.

“Our strong focus now is to transition that change into customer-led growth. It is about transitioning into the future and making sure we are really engaged with making our customers successful – focusing those gains on our future and solidifying our industry.”

The positive relationship that now exists between KiwiRail management and the RMTU saw the parties last year able to negotiate a revised collective employment agreement in just three hours

The union’s perspective

RMTU general secretary Wayne Butson says the relationship between KiwiRail’s management and workers had progressively eroded over the years to the point where it was “adversarial and an impediment to the business”.

Such culture was epitomised by a “turbulent” first meeting in 2014 with the-then KiwiRail chief executive Peter Reidy who, upon receiving an address from Mr Butson, “stormed out of the place” – a first in the latter’s 25-year experience of union/management encounters.

“We were coming off a really low base; there was not a lot of respect, there was no trust and it was really not good,” says Mr Butson. “But very quickly, we established a very strong relationship of trust – his [Mr Reidy’s] reactions were always considered, they were not knee-jerk.”

A pilot of the HPHE initiative was subsequently rolled out during the 2015/16 financial year at Wellington’s Hutt Workshops – an operation which Mr Butson recounts was at that time plagued by various issues and even threatened with closure.

“A DX loco goes into the Hutt Workshops now and it comes out in almost half the time with the same work done to it – and the failure rates have plummeted. The quality of the product coming out the other end is really good, and 90% of that is attributable to the fact that the teams now operate as teams,” he says. “It has been a four-year process, but morale is now spectacular.”

A goldmine of knowledge

Mr Butson says that by tapping into the “goldmine” of knowledge available onsite, workflows have been better “mapped” and a considerable amount of downtime has been removed from processes.

“They have these visual display boards so every member of the team knows how well everything is going every day, and they all have an opportunity to say ‘there is a better way we can do this’. Tonnes of miles of forklifting, crane work and everything has disappeared out of the process because the guys have been empowered to have control over the work and how they do it.”

Mr Butson describes HPHE as a form of ‘workplace democracy’. “We maintain our rights and management maintain their rights, but it is a mutual acknowledgement that we’re both here to stay, and if we work together, we’ll get much better outcomes. Management had no trouble talking about productivity and this and that, but we kept saying ‘there’s got to be our side of the ledger as well’ – Mr Reidy got that. The turnaround has been quite spectacular. It has possibly been better than I thought it could be.”

The ‘dialling down of managerialism’ in the business reminds Mr Butson of the culture when he first entered the rail industry in the mid-1970s. “The family spirit, the comradeship was completely rampant. When I came into rail, if the pits needed cleaning, there was a working bee – sure, everyone got paid, it was never voluntary stuff, but we did it.”

Nonetheless, Mr Butson emphasises, the culturally revamped business cannot rest on its laurels. There is still much that can be done.

Iain MacIntyre is an award-winning journalist who specialises in transport issues within New Zealand; he can be contacted ati.macintyre@xtra.co.nz